# How Does a Smart Contract Relate to a Decentralized Application (Dapp)? ▴ Learn

**Published:** 2025-11-07
**Categories:** Learn

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## How Does a Smart Contract Relate to a Decentralized Application (Dapp)?

A smart contract is the backend logic and core functionality of a dApp. The dApp is the complete application, including a user interface (frontend) that interacts with the smart contract (backend) on the blockchain.

Essentially, the smart contract defines the rules and state changes, while the dApp provides the means for users to interact with those rules.

What Is a Decentralized Application (Dapp)?

What Is a ‘Hidden Limit Order’ and Is It Compatible with Stop-Limit Functionality?

What Is “Flash Loan” Functionality and How Is It Secured by Smart Contracts?

What Are the Implications of a Centralized Backup System for a Decentralized Application?

## Discover More

- 
### [How Are the Findings of a Smart Contract Audit Typically Categorized and Prioritized?](https://crypto.greeks.live/learn/how-are-the-findings-of-a-smart-contract-audit-typically-categorized-and-prioritized/)
![A highly polished metallic surface, resembling a data platter or perhaps a centralized exchange ledger, strongly reflects a translucent cyan sphere etched with a distinct Yin-Yang symbol. This assembly is juxtaposed against dark, intricate electromechanical components suggesting precision infrastructure like a high-frequency trading engine or hardware security module. The cyan orb symbolizes an intrinsic asset volatility metric perhaps analogous to implied volatility in options trading or stochastic resonance within decentralized finance protocols. The mirrored surface implies instantaneous settlement potential, contrasting with the eternal duality represented by the symbol, referencing the ongoing balancing act of on-chain governance versus off-chain execution mechanisms. This setup conceptually frames complex risk management strategies concerning exotic cryptocurrency derivatives and systemic market friction. The structure conveys the fragility inherent in maintaining arbitrage opportunities across disparate liquidity pools under extreme market microstructure stress.](https://crypto.greeks.live/wp-content/uploads/2025/10/Quantum-Ledger-Imbalance-Visualized-Through-Reflective-Medium-and-Spherical-Volatility-Index.jpg)

Audit findings are categorized by severity (e.g. critical, high, medium) and prioritized based on impact and likelihood.

- 
### [How Can Users Verify the Code of a Rebase Token’s Smart Contract?](https://crypto.greeks.live/learn/how-can-users-verify-the-code-of-a-rebase-tokens-smart-contract/)
![The visual dissection exposes polished metallic drive components cradled by segmented beige and muted cyan housing, resembling an exploded view of a legacy storage medium or complex bearing assembly, symbolizing the latent data structures within digital assets. This fragmentation specifically represents the inherent fragility and potential for rapid structural change in DeFi protocols where Impermanent Loss and Liquidation Cascades manifest as mechanical failures. The components articulate complex interdependencies mirroring the Greeks in exotic options pricing models such as Vega exposure across synthetic collateral pools. Careful examination suggests mechanisms related to Automated Market Maker liquidity provision fragmentation versus centralized exchange order book segmentation under extreme slippage conditions demanding sophisticated risk parity management and robust collateralization ratios for sustainable yield farming operations.](https://crypto.greeks.live/wp-content/uploads/2025/10/Deconstructed-Decentralized-Finance-Mechanism-Revealing-Embedded-Volatility-Surface-and-Hedging-Instrument-Mechanics.jpg)

Users can verify the code of a rebase token's smart contract by reviewing the project's open-source code on GitHub and checking for third-party security audits.

- 
### [How Do Oracles Feed Real-World Price Data into a Derivative Smart Contract?](https://crypto.greeks.live/learn/how-do-oracles-feed-real-world-price-data-into-a-derivative-smart-contract/)
![Two elongated structures, one pale cream and one light cyan, appear coupled via chrome linkages against absolute blackness, evoking a conceptual visualization of cross-chain asset alignment or derivatives execution. The internal blue luminescence hints at underlying data streams or token flows characteristic of sophisticated DeFi operations. This configuration visually represents the binding nature of collateralized debt positions where counterparty risk necessitates stringent synchronization, analogous to the collateral posting for an options writer managing delta exposure. The structure implies a mechanism for continuous reassessment, vital for maintaining solvency across disparate liquidity pools or navigating complex futures contract settlements where margin maintenance dictates operational continuity. The aesthetic suggests engineered precision within high-frequency trading environments where slippage mitigation and settlement finality are paramount blockchain imperatives.](https://crypto.greeks.live/wp-content/uploads/2025/10/Interlocking-Digital-Asset-Hedging-Mechanisms-Illustrating-Margin-Call-Dynamics-In-Decentralized-Finance.jpg)

Oracles retrieve and submit real-world data, like asset prices, from external sources to the blockchain, enabling smart contracts to execute based on current market conditions.

- 
### [How Does a Smart Contract Determine the ‘Correct’ Price from Multiple Oracle Sources?](https://crypto.greeks.live/learn/how-does-a-smart-contract-determine-the-correct-price-from-multiple-oracle-sources/)
![Two textured orthogonal linear elements, one beige-toned and one verdigris speckled, cross at a central fulcrum supporting a compact omnidirectional camera sensor dome. This configuration models a nexus point for decentralized governance or a cross-chain communication bridge facilitating complex financial engineering. The linear slots suggest adjustable parameters analogous to strike price specification or volatility surface calibration in exotic options structures. The camera symbolizes granular real-time market surveillance vital for automated liquidation monitoring and algorithmic arbitrage execution across disparate decentralized finance liquidity pools. This visual metaphor speaks to the precision required in managing synthetic asset collateralization ratios and embedded option pricing within decentralized perpetual futures markets, ensuring efficient settlement mechanisms.](https://crypto.greeks.live/wp-content/uploads/2025/10/Decentralized-Sensor-Array-Intersecting-for-Algorithmic-Hedging-Protocol-Optimization-in-Digital-Assets.jpg)

By aggregating data from multiple sources and calculating a median or volume-weighted average price (VWAP).

- 
### [How Does a Flash Loan Differ from a Traditional Smart Contract Loan?](https://crypto.greeks.live/learn/how-does-a-flash-loan-differ-from-a-traditional-smart-contract-loan/)
![This sharp abstract configuration of refractive cyan and pale geometric planes converging on a central multifaceted core suggests highly structured financial engineering. The central spire mimics a complex option payoff structure, perhaps illustrating optimal execution pathways in high-frequency trading. The interplay of light and shadow across the transparent planes evokes the dynamic spread between bid ask liquidity provisions on an Automated Market Maker platform. This visual metaphor represents the inherent convexity risk profile associated with perpetual swap hedging strategies navigating ephemeral market microstructure inefficiencies. The structure embodies intricate financial architecture beyond simple spot asset exposure requiring deep understanding of synthetic asset mechanics and collateralization ratios within DeFi yield farming protocols.](https://crypto.greeks.live/wp-content/uploads/2025/10/Crystalline-Geometric-Abstraction-Modeling-Volatility-Surface-Stratified-Liquidity-Pools-in-Decentralized-Finance.jpg)

Flash loans are uncollateralized and must be repaid in the same transaction; if not, the transaction is reverted, ensuring zero lender risk.

- 
### [What Is a Decentralized Application (Dapp)?](https://crypto.greeks.live/learn/what-is-a-decentralized-application-dapp/)
![The off-white cylindrical device mounted on a conical base displays sleek, minimalist aesthetics suggesting advanced ledger technology integration. A dark, recessed central band features a thin, luminous cyan indicator line, mimicking a real-time delta hedge status or potential margin call notification signal within a decentralized exchange environment. This visual architecture evokes the rigorous, low-latency infrastructure required for sophisticated synthetic asset issuance and complex volatility surface calibration for perpetual swaps. The small lens aperture suggests an on-chain identity verification module or biometric key management for cold storage wallet access, emphasizing robust security protocols against front-running attempts in high-frequency algorithmic trading strategies involving exotic options strategies like variance swaps on stablecoin pegs. The design represents the convergence of hardware security module precision with decentralized finance governance mechanisms.](https://crypto.greeks.live/wp-content/uploads/2025/10/Asymmetric-Crypto-Derivative-Pricing-Mechanism-Signaling-Interface-Monitoring-Secure-Custody-Apparatus.jpg)

Software running on a blockchain network, governed by smart contracts and no single central authority.

- 
### [How Does a Futures Contract Differ from a Forward Contract in the Context of Cryptocurrency Trading?](https://crypto.greeks.live/learn/how-does-a-futures-contract-differ-from-a-forward-contract-in-the-context-of-cryptocurrency-trading/)
![This composition depicts a dark high-gloss sphere resting atop stratified geometric forms in muted beige and charcoal tones against absolute blackness suggesting latent market potential. The structure symbolizes the calibration of implied volatility skew within perpetual swap contracts an abstract representation of capital efficiency. The glossy orb reflects ambient light mimicking the opacity or transparency inherent in Black Scholes modifications applied to novel blockchain-native structured products. Precision tooling illustrates the execution fidelity required for efficient options market making necessitating robust oracle feeds for real-time settlement layer reconciliation bypassing counterparty risk. This artifact visualizes the complex interplay between asset price discovery and strike price determination across regulated digital asset exchanges.](https://crypto.greeks.live/wp-content/uploads/2025/10/Asymmetrical-Exposure-Quantification-in-Decentralized-Finance-Derivative-Pricing-Mechanism.jpg)

Futures are standardized and exchange-traded; forwards are customized, OTC, and carry higher counterparty risk.

- 
### [How Does a Smart Contract Handle a Bond Default or Bankruptcy Scenario?](https://crypto.greeks.live/learn/how-does-a-smart-contract-handle-a-bond-default-or-bankruptcy-scenario/)
![Dark cyan striations traverse a matte, pale green planar surface intersected by deep charcoal boundaries suggesting layered digital architecture. This abstract topography models the opaque settlement layer underlying decentralized finance protocols where impermanent loss manifests as micro-fractures across yield farming narratives. The visual stress points emulate the slippage experienced during high-frequency execution of volatile spot trades impacting automated market maker mechanisms. Such structural imperfections hint at underlying oracle manipulation risks or latent counterparty credit exposure within novel synthetic asset construction. The dark void signifies the untracked off-chain ledger state challenging transparency mandates for sophisticated derivatives like perpetual swaps.](https://crypto.greeks.live/wp-content/uploads/2025/10/Macro-Analysis-of-Tokenized-Asset-Structure-Fluctuation-Indicating-Liquidity-Pool-Instability.jpg)

A smart bond can automatically trigger a default state and transfer collateral if a payment is missed.

- 
### [Can the Terms of a Smart Contract Be Changed after It Is Deployed on the Blockchain?](https://crypto.greeks.live/learn/can-the-terms-of-a-smart-contract-be-changed-after-it-is-deployed-on-the-blockchain/)
![This macro perspective reveals an interplay between a smooth, pale sage component and dark, complex metallic gearing exhibiting minute moisture droplets suggesting resilience against environmental factors. Conceptually, this symbolizes the rigorous architecture underpinning decentralized exchange mechanisms, perhaps representing the physical manifestation of an immutable ledger or a sophisticated Automated Market Maker pool interface. The circular structure resembles a precise Option Payout Diagram component or a finely tuned Perpetual Futures rolling mechanism. The meticulous engineering speaks to the deterministic nature of smart contract execution required for accurate Strike Price determination and effective Liquidity Provision within DeFi derivatives markets, far removed from traditional exchange opacity, mirroring rigorous Hedge Ratio maintenance under stress testing protocols.](https://crypto.greeks.live/wp-content/uploads/2025/10/Precision-Engineering-Mechanisms-Modeling-Volatility-Surface-Calibration-in-Decentralized-Finance-Instruments.jpg)

Smart contracts are typically immutable, but they can be made upgradeable by using a proxy contract that can be pointed to new code.

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